Securities & Exchange Board of India cautions investors against stock market scams involving unregistered account handling services

The Securities & Exchange Board of India (SEBI) issued a warning to investors about scams in which individuals offer “account handling” services to invest on an investor’s behalf, often promising risk-free profits. SEBI advised investors not to trust such claims and not to share demat or trading account credentials with anyone. SEBI described how these “account handlers” typically present themselves as experts, portfolio management service (PMS) providers, or fund managers, set a minimum capital requirement, and demand a share of the investor’s profits while showcasing purportedly successful trades for other clients. They obtain login credentials and place trades directly in the investor’s account, meaning any profits or losses accrue to the investor, while the fraudster seeks a profit share without sharing losses. SEBI noted these entities are not SEBI-registered and fall outside SEBI’s purview, and urged investors to transact only through SEBI-registered intermediaries and authentic trading apps, verifying registration status on SEBI’s website before investing.